With Trump's state visit days away, blame game begins over Mandelson scandal

"What a week. What a mess." A senior Labour MP is not the only one in disbelief at the latest - you couldn't make it up - mishap for this government.

How Downing Street handled revelations about Lord Mandelson's friendship with the wealthy paedophile Jeffrey Epstein was the first test of the new senior team in No 10.

The uncharitable view is they flunked it by not acting quickly enough – putting the prime minister's face on the calamity by sending him into the bearpit of Prime Minister's Questions (PMQs) with a staunch defence of his man in Washington.

They knew there were new allegations about his relationship with Epstein. The direction of travel seemed set - and Mandelson would likely have to go.

The even more uncomfortable factor is that last week the prime minister defended another colleague, Angela Rayner, when - you guessed it - the direction of travel in Westminster seemed set, and she would likely have to go.

It's undermined the prime minister's own authority and blown the chance of a quick autumn reset for Labour, when the party was desperately trying to turn the page.

The more generous argument made by Sir Keir's allies - he's been let down by two different people in two different ways, and has had to front up to clean up their different messes.

"Keir is frustrated and a bit angry because he is having to deal with the conduct of others, rather than show what he is trying to do," one source says.

Another says: "He hired someone who didn't tell him the full truth."

No 10 doesn't imagine that the damage of the last fortnight of farce is limited to those who have departed government.

And as they absorb the scale of the embarrassment over Mandelson's friendship with Epstein, new details over who knew what - and when - are emerging all the time.

Westminster sources have suggested the prime minister himself had raised questions about Mandelson's links with Epstein during an initial vetting process carried out by the Cabinet Office before he was given the job.

But then he was checked out again by the Foreign Office once he'd been appointed.

Even before Labour won the election in 2024 there had been a desire in Sir Keir's circle to look beyond the traditional diplomatic appointment for their ambassador to the White House, one of the government's plum jobs.

They had noted how the former Australian Prime Minister, Kevin Rudd, was sent to DC and determined that a politician could be the right choice.

With his experience as a trade commissioner, an impressive spider's web of contacts, and respected political nous, Mandelson was soon determined to be an excellent potential fit.

Sir Keir's powerful chief of staff, Morgan McSweeney, believed there were only two qualified candidates for the role, and was enthusiastic about Mandelson.

Before the final decision was made last autumn, the Cabinet Office was asked, as it would be for any such candidate, to consider whether he was fit to be offered the job.

Already at that stage it was no secret Mandelson had been friends with Epstein, so it was obvious those links would need to be considered.

I'm told a file on Mandelson from the Cabinet Office's Propriety and Ethics Team (PET), whose job it is to know where the bodies are buried in Whitehall, was presented to the prime minister that included information about his relationship with the disgraced millionaire.

On reading this file, Sir Keir had three questions he wanted to clarify with the peer, a No 10 source tells me: Why had he continued his friendship with Epstein after he was first convicted and not broken contact with him?

Why had he stayed at one of Epstein's houses when the financier was in jail?

And was he a "founding citizen" of an ocean conservation charity that Epstein had backed?

That trio of questions was put to Mandelson in an email from Sir Keir's chief of staff McSweeney on his behalf.

The peer, I'm told, replied to those questions in an email in which Downing Street sources now say he was "economical with the truth".

It's understood Mandelson believes that he was truthful and frank about his association with Epstein, and told No 10 that he had not stayed in Epstein's Manhattan apartment in 2009 while Epstein was in prison. Another source confirmed that he told Downing Street he had not stayed there.

Court documents revealed in 2023 Epstein told his private banker that Mandelson would be staying at the property. Mandelson has never explicitly denied or confirmed he did, although it has been reported that he had no recollection of doing so.

It's worth noting that none of those issues - the possible house stay, the charity, or the continued friendship - were discovered during the vetting process. They had been reported in previous years.

But the guarantees relayed to the prime minister by Mandelson were considered sufficient to be worth the gamble of giving him the job.

Once the appointment was then made, sources suggest the "developed vetting" process then kicked in, under the auspices of the Foreign Office.

The normal process for government appointments is dependent on the job being given and the sensitivity of the material and information to be handled.

But there is scarcely a job with a higher level of trust required than the White House ambassador, given the two countries' links on security, defence, trade and intelligence.

I'm told nothing was flagged to No 10 as a result of the DV process, which would have involved an in-person interview which in this case, "ought to have been completely forensic, but they must have used the wrong lens," according to another senior figure.

Unlike the PET file, Downing Street would not receive the results of such a process as a matter of course, even in an extremely high-profile appointment. The DV process is a standalone routine.

And Downing Street sources insist that they weren't made aware of any problems, so everything went ahead.

The upshot? Even though there were two different processes checking out Mandelson's background, which publicly was known to include dealings with a notorious wealthy sex offender, neither appear to have turned up anything major - nor the now notorious emails which investigative reporters were able to locate recently.

One Whitehall insider told me it was "staggering - either they skipped the process of any basic due diligence, or they did that process and missed the obvious questions".

"No one involved in making the appointment cared enough to check whether all the risk had been identified in appointing a man who had twice previously had to resign over his judgement. Careless doesn't cover it."

The government has repeatedly said this week that part of the problem was the messages between Mandelson and Epstein were from a defunct email address.

Yet a senior Whitehall figure tells me it would have been possible to locate those messages had more questions been asked, and forensic background digging been done.

Neither Downing Street nor the Cabinet Office wanted to comment. The BBC approached the Foreign Office which has not responded.

Until this week, it seemed No 10's calculated risk of appointing Mandelson was paying off.

Not just because US President Donald Trump appeared to enjoy his company, praising his "beautiful accent" on camera recently in the Oval Office, but also because the UK had got its trade deal.

The state visit was all about to unfold in its pomp and glory. Sir Keir appeared, unlike many other global leaders, to have managed to build a warm and functional relationship with the most powerful man in the western world.

All of that, at least partly down to the smooth talking and politicking of the ambassador.

What he and No 10 were enjoying as a successful tenure was to be suddenly disrupted when the peer featured in what's known as the Epstein "birthday book". It features a cosy message - Mandelson branding Epstein his "best pal", and a photograph of the two in which Mandelson is wearing a bathrobe.

And what was to prove more serious, reporters at the news agency Bloomberg managed to get hold of a cache of Epstein's emails, which included his communications with Mandelson over months and years.

In an attempt to get ahead of the story, Mandelson predicted that a whole slew of contact between the two was about to emerge into public view - and he described the revelations to The Sun as "very embarrassing". This sent alarm bells clanging back in Whitehall.

He hadn't shared the contents of the emails with Downing Street and had been "dismissive, claiming there was nothing new" in the stories emerging about his friendship with Epstein earlier in the week, sources suggest.

But, by late on Tuesday, the government was aware that more damaging allegations were coming, and contacted the peer to ask what was going on.

On Wednesday morning, Mandelson's prediction of there being more to come was first reported, just as, in the normal routine, No 10 was planning the day and preparing the prime minister for his weekly PMQs bout in the Commons.

At noon, before government had heard back from Lord Mandelson, the prime minister gave a staunch public defence of him in a move that now looks foolhardy.

But when Mandelson did reply after PMQ's, the government didn't think his answers were good enough.

The prime minister's chief of staff McSweeney was called out of a meeting in a secure room in Whitehall where mobile communications are forbidden.

Sources suggest the decision was made soon after to ask Mandelson to resign.

He refused, trying to "brazen it out" - sources suggest he kept "telling everyone it would be fine".

On Wednesday No 10 was also trying to weigh up the impact of losing the ambassador on the crucial state visit of the US president, just days away, and also what the legal ramifications would be of forcing Mandelson out.

But later on Wednesday night, the full extent of those emails were published by Bloomberg, and the prime minister read the exchanges in all their gory glory.

"Keir was furious," I'm told, and on Thursday morning, he made the formal decision with the foreign secretary that if Labour's veteran fixer wouldn't go on his own accord, he'd be sacked.

On Friday the prime minister was working at his country retreat, Chequers, mulling over his conference speech for which Sir Keir has "picked up the pen", in a more proactive way than in times gone by, aware this is a moment when the pressure to lift the mood and show his worth is intense.

After a first year in office that disappointed many in the Labour Party, and left them in the polling doldrums, his big moment on the podium at conference was already set to be a high-wire act.

After this chaotic fortnight, it's "fortuitous we are heading to conference and we can grab the mic," one insider said.

Another senior figure told me: "I don't see problems that aren't fixable."

But when it comes to Lord Mandelson, the clamour may take some time to fade. "This isn't over – No 10 is in total denial," a party insider said.

A different prominent source told me the Mandelson mess "is just another big misstep".

Alongside Sir Keir, there is also growing disquiet about the prime minister's chief of staff McSweeney.

It's no secret he was keen to appoint Mandelson, even though he and the prime minister did have questions about his relationship with Epstein.

But sources dispute he was trying save the US ambassador from his fate this week.

It's said he agreed on Wednesday lunchtime Mandelson had to go, before travelling to Brussels for meetings, leaving him out of the country when the final call to sack him was made.

When politicians are down, powerful staffers often become a target.

Opposition politicians and critics on the inside can even appear to enjoy the hunt for someone to blame.

However, McSweeney is central to Sir Keir's leadership.

"If there's no Morgan, there's no Starmer," one senior Labour figure said, warning MPs warming up to point the finger to be careful about where it all might lead.

After a dreadful start of what should have been a shiny new political season, one cabinet minister says in sorrow: "We have made the right big strategic calls, but there is just no way that we should be in this position after a year."

But others believe all is not lost. Just as Labour slumped in popularity at breakneck speed after winning the election, senior figures suggest their fortunes could improve dramatically quickly too.

Volatility in politics can be governments' enemy, but also potentially be their friend.

Yet right now, it's hard to see where Labour can find much comfort.

There is little option but to keep going, to focus on what insiders characterise as "good announcements" coming in the next few weeks, presenting a huge opportunity for the prime minister to shift the dial and boost the party's confidence.

But one minister joked after a shocking fortnight for the government: "I keep thinking maybe it's all a very detailed dream and I'll wake up."

"But then no, this is reality, and we just have to get on with it." They certainly do.